Big oil and gas companies are at the heart of Donald Trump's energy agenda. The future American president intends to focus heavily on fossil fuels during his mandate. However, they proudly display their environmental ambitions. Decryption.
We knew that Donald Trump was not a fervent climate activist. We have further proof of this since his team is developing a program focused on oil and gas. If it is applied, authorizations for new oil drilling will be issued in particular. Donald Trump also intends to repeal certain laws and regulations on energy and climate passed under the mandate of Joe Biden. These projects are making companies in the sector jubilant.
However, they have made commitments on phasing out fossil fuels. This is not new, since 2021, the International Energy Agency has been urging them to stop any new oil exploration projects with thecarbon neutrality goal by 2050.
A sector under pressure
Some “oil majors” invest in green energies, but this is only a tiny part of their activity. They are obviously not abandoning fossil fuels. The proof is: in 2022, investments in renewable energies represented less than 5% of their expenses. The room for progress is therefore significant. To better understand today's situation, we have to go back four years, to the end of the Covid pandemic. The very low demand worried investors and businesses because oil, like gas, was at a very low level. The large groups have therefore focused a little more on renewables, believing that this market would constitute a better economic activity than fossil fuels. For example, BP has committed to reducing its oil or gas production by 40% by 2030!
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Full back machine!
These investments did not pay off. Illustration with these figures: Exxon Mobil, which has not taken this path, preferring to invest in areas such as the extraction of hydrogen or lithium, has seen its price on Wall Street jump since 2019… +70%! An increase which contrasts with BP, which lost 19% over this same period. As a result, BP is backtracking and will increase its spending on fossil fuels to the detriment of renewables. So what we need to understand is that today, investors are rewarding the oil majors who have not adopted wind or solar power. Concretely, if climate change is a risk for the planet, investors’ priority is to make a profit.
Oil companies show green
The paradox is that we see many large oil companies diversify and invest in green. However, according to the International Energy Agency, the giants invest twice as much in renewables as in fossil fuels. But certain associations denounce a double discourse: that of invoking this excuse to produce even more oil.
In any case, what we are observing is the pragmatism of the oil majors who, despite the big green, wind and solar campaigns, remain addicted to fossil fuels. And what we will especially have to watch is how they will react if the price of oil falls again!
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